Lithuania is seeking economically favourable terms in negotiations with German defence manufacturer Rheinmetall over plans to build a 155 mm artillery propellant production competence centre worth more than 400 million euros, the head of the government’s investment promotion agency said.
Elijus Čivilis, CEO of Invest Lithuania, said negotiations remain difficult as the government seeks to ensure the project serves the country’s strategic and economic interests.
“I cannot provide specifics, but negotiations are continuing,” Čivilis told BNS. “The biggest challenge is that Rheinmetall is simultaneously implementing many expansion projects and has very limited resources to devote to new ones.”
“We want this to be an economically beneficial project for Lithuania that strengthens our entire supply chain. We do not want a project that does not meet our interests. That naturally makes the negotiations more difficult because we also have our own position,” he said.
Last November, Rheinmetall announced plans to build the propellant production competence centre in Lithuania during a groundbreaking ceremony for its 155 mm artillery shell factory in Baisogala.
Čivilis said locating the new facility next to the shell factory would be advantageous but was not the decisive factor in selecting a site.
“The main criteria remain the size of the plot, the available infrastructure and how quickly it can be developed,” he said.
He added that authorities are not considering taking back land transferred to the Lithuanian University of Health Sciences in exchange for property used to build the first Rheinmetall factory near Baisogala.
According to Čivilis, Lithuania has currently reserved 14 state-owned land plots for industrial investment projects as it seeks to plan future industrial zones more effectively.
Rheinmetall and Lithuania’s Economy Ministry signed a memorandum of understanding last November to establish the propellant production competence centre. Earlier this year, the government said it had received the company’s investment proposal and would negotiate the scale of the investment, the business plan and future production.
Rheinmetall CEO Armin Papperger said last year that the competence centre would represent a larger investment than the artillery shell factory already under construction in Radviliškis District and would be worth more than 400 million euros.
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